Mad Money 08/12/26 | Audio Only

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Cray America. My friends, I'm just trying to make you a little bit of money. My job is not just to entertain you, but to educate you, teach you. Call me 1800 743 CBC. Tweet Mitchum Kramer. Sometimes sometimes downtown Manhattan turns to an American Pamplona. And when it does, you better run with the bulls or get the heck out of the way. Today was one of those days where if you bet against the data center cattle, you got trampled. There's a reason the Nasdaq was up.54% while the Dow dropped 22 points and the S&P edged up just 26%. How did Wall Street turn into Estafada? Pretty simple. For weeks now, the semiconductors and their betterers in the data center have been trying to mount in advance, but things just keep getting in the way. We thought that the stampede looked likely until the fourth week of July. Not when a fund called situational awareness amassed a a huge amount of leverage and had a repository of all things data center blow up spewing data center stocks more efficiently than Reagan spew vomit and the exorcist. Leopold Ashley Benner the boy wonder who ran that fund had borrowed so much money to build his $45 billion portfolio that even a small dip in his stocks just all took trashed his fund. The margin butchers took their pound of flesh. Don't worry about Ash are you? I've seen these types, you know, invalidictorian kind of stuff. They usually go a couple weeks and then they get the money again because millionaires moths to flame. His stocks though, different story. They got crushed even as a business for almost all of them was terrific. That really threw me off. Real irony here before I get to the real nitty-gritty. On July 24th, right when he was teetering, he sent out a letter urging his investors to send in more money because, quote, "At times we call out opportunities that seem like a particularly good time to add funds if you have been waiting for one." End quote. He was right, except he created the opportunity with his own personal crash. He just didn't get to participate in it. The demise of situational awareness stopped the nation data center rally in its tracks. Now, I was personally sickened by it. That Friday morning of this funds doom, I was telling club members to buy the stock of Intel after an amazing quarter. It was almost immediately mauled by the situational awareness bear. The stock tipped up to 110. That made sense to me, up about four bucks. But next thing you know, it was 109, 108, 107, 106, 105, 104, falling 16 points from 110 before an anemic bounce. I was situationally unaware. The takedown for Intel and so many other semiis seemed to last forever and we thought there was something really wrong. Nvidia stock traded from 212 at the time of detonation 190. Data center builder corewe went from 83 to 60. Its doppelganger Npius went from 219 to 148. Optical provider Lum fell from 833 to 602. Data infrastructure special super micro dropped from 30 to 25. If you were like me, you felt like drinking some cheap scotch while you lay on a dirty lenolium floor. Now that the group's tried to find a base, but it's been touch and go ever since situation waiters got its clock cleaned. We never knew what was going to happen next. But on Monday, a day when I was busy trying to land a 100 pound tarpon, that's that's Philadelphia talk for tarpon. Nvidia CEO Jensen was busy landing an entire raft of Wall Street biggies to launch a brilliant idea, a securization of basically compute, the sum total of the value that comes out of the data center every minute of day. The consortium is putting $500 billion behind it. big money you can trade compute like a bond just like a mortgage bond or a bond backed by auto loans packaged and securitized just like those for many skeptics this was a bridge too far a kooky idea that made no sense because don't the chips that Nvidia make last about they last like three years right I mean then they lose all their value don't they I mean isn't Nvidia just enriching itself circular reasoning like lazy Susan all sorts of poppyc at the same time Intel worried about its balance sheet had to come to the market with 15 million shares raise some money. The deal would be priced at 95. A huge decline from its recovery right back run back to $100. That would well closer to where the situational implosion was. If that weren't enough, interest rates shot up to a 19-year high because oil climbed back over 90 as Iran and Trump were once again at loggerheads. Now, that was the scenario when the bulls were snorting, getting ready to stampede. Oh, we had a clue that something big was about to break up. We got so much demand for Intel that they upsized the deal to 20 million shares and still sold out, moving up two bucks Tuesday morning, almost from the get-go. We started to get some more positive feedback about the GPU securization. Risk takers thinking hm might be worth a flyer. If only because almost everyone important seemed on board this morning. The rockets went off and the fabled six fighting bulls, Super Micro, Nvidia, Intel, Nibbius, Luminum, and Core Wave, tore out of their pens and proceeded to trample the non-believers who didn't realize you're taking your life in your hands when you bet against these companies. It actually started last night when Super Micro reported, not one of my faves, but it's a key data infrastructure player and it charged out and gored anyone in his path with a sharply better than expected guide. And there's a lot of people in his path because it's heavily shorted. Then today, aided by a benign consumer price index number, the data center stocks couldn't be contained. Lumenum, which makes fiber optics, told a terrific tale. We got coherent on tonight. See if it matches the company's performance. Competitor Intel surging through a $100 barrier. Lady at $100.95. Cloud platform Nibbius worth 66 bucks, $259. And finally, Coreweave reported a monster quarter, demonstrating their strategy of building data centers and betting Nvidia chips would have a longer shelf life than 3 to 5 years was more than paying off. Quo CEO Michael Intrider told us an insanely good story when he appeared on Squawk in the street. He gave us genuine proof that older Nvidia GPUs are as valuable or even more valuable than when they were built. Even ones that came out of the foundry 9 years ago. Yes, of course they are. We got a chip shortage. Invidious chips are the most soughta of all semiconductors and they hold their value. Anyone who was worried about compute back bonds being dragged down by depreciation now looks like a dope. These chips aren't like cars that lose half their value the moment they drive with a lot. They're more like fine jewelry. Plus, people keep forgetting that Nvidia also has a software company with it uh its CUDA product and the mass developer ecosystem that can be upgraded through all cycles allowing 9-year-old chips to keep their value even appreciating. Auto loans can't make that claim, can they? In the end, Courte finished up $17. Nvidia rallied $7. Remember that's the world's largest company. Many of these bulls are now knocking on the door of where they were before situational awareness imploded. Now just like in Pamplona where a bunch of bulls are released after the fighting bulls, pretty much every semiconductor company took off. Remember those tech companies that have to buy the semis? Well, they're overrun. So their stocks don't get to play, including yes, the Magnificent 7. I cannot stress enough how important today's session was, though. Ever since the situationally unaware Leopold Ashton Brener took down too much debt and got margin to kingdom come, this group has languished while the financials, the healthc carees and the retailers rocked. It looked like that most the most important stock in the market which is Nvidia might not be able to withstand the heat from the bears who talked about how the whole securization plan was just another way for Nvidia to pay itself for doing its business. Now we know it's the real deal. Cisco and uh and Sarah Bros reported tonight and the market wasn't really seeing much pamplone in them. We'll see what they have to say tomorrow. The analysts will come out. Cisco CEO Chuck Robbins will tell us what's really going on. It's walking the street. It always does. So here's the bottom line. As long as the bond market stays benign, we can expect a course of shell shocked analysts to raise their price targets on the data center stocks pounding the table. It's time to buy. Of course, the best time to buy was when situational awareness was forced to sell its holding in that Reagan moment. But this, well, let's just say the prices are still below their peaks and now they seem primed to go higher. I'm going to give you my outlook and tell you which of these I like the most when you tune in to our noon CBC Investing Club meeting. Not a member? No time like the present. You don't want to miss it. Better than Reagan. Let's go to John in Ohio. John, >> thanks for taking my call, Jim. Love your show. >> Thank you, John. Man, thank you. Thank you. I come back from a couple days off and I like that. I like it cuz I'm coming in fresh. I'm coming in hot. What do you got? >> There we go. So, this company did 2.3 billion to 11 billion in volume, added 600,000 new engaged customers, and they didn't lose any customers in their sports book. And then, more importantly, their brokerage, their exchange, and their market maker are all inhouse now. And their app is live in all states, whether it's prediction or it's um sports book. And they maintain their fullear guidance and adjusted IBIDA. Jim, has this company, DraftKings, finally turned the corner? Well, I like Trafkings. I have been wrong. I don't like being wrong, but I also admit that it's better to admit being wrong than say, "Hey, you know what? I suddenly like it because I've liked it for a long time. And I do think it's basing, but I've been so wrong. Why would you listen to me on it?" God, that's a that's damning with mean praise. As long as the bond market stays tame, I think we can expect more and more analysts pounding the table in the data center stocks tomorrow morning when we wake up. I suppose this moment will have to do a man tonight. Novo Nordis. Wow, what a dog. That's in the midst of a major reset, though. Will it be enough for investors to take another look at the company? I'm getting all the last of the CEO and you're going to be surprised about my verdict. Then what's behind the incredible breakout in Zoom communications? I'm taking a close look at the stocks rapid rise and coherent is on the movie after earnings. I'm sitting down with the CEO amid a busy week of data center news, particularly about fiber optics. So stick with Kramer. Don't miss a second of MadMoney. Follow Jim Kramer on X. Have a question? Tweet Kramer #madmentions. Send Jim an email to madmoney@cnbc.com or give us a call at 1800743 CNNBC. Miss something? Head to madmoney.cnbc.com. All right. What happened to the stock of Novo Nordis, the Danish drug company, you know, as the inventor of Ompic and Muggoi. Last week, they reported a beat and race quarter. Yet, the stock fell nearly 6% the day those numbers were released. Since then, well, it made up most of its losses, but that was a stunning reaction. Hey, keep in mind Nova and Nordis helped invent the whole GLP-1 category and their obesity and diabetes businesses are now printing money. In January, they launched a pill version of WGOI. It's already been prescribed more than 5 billion times, mostly to people who never tried the injections. In the end, though, this is a turnaround story, one that reduces headcount by about 15%, but it still don't get much love from Wall Street. Earlier today, I got a chance to check in with Mike Dustar. He's the president and CEO of Nova Nordis. Take a look. Michael, everyone knows you because you're the person that introduced the GOP-1 to the world. Um, and I'm so glad you're here. We haven't seen each other since the JP Morgan conference. I thought you just tell us fill us in first of all what's happened since then because I know that there's been kind of a reset of your company. >> Thanks so much. Uh, yes. So, a lot has happened. more and more people are getting used to either taking a pill or injecting themselves and more importantly I think we're trying to understand more and more around the benefits of GOP1. So if you go back actually compared to about 12 months ago when I got my job, we have 70% more people in US using our products to a large extent because of the introduction of the pill. >> Right? >> So so this has been surprising most of the investors. I will also tell you it has been surprising us the the overwhelming number of the people that have come to the pill. We have now globally 1 and a.5 million people on the pill in a very short period of time. The number of prescriptions that are written here in US have surpassed 5 million. Jim, this makes this launch the best product launch in the history of pharmaceuticals >> of pharmaceuticals not of Nova. >> So, so, so one of my colleagues told me that maybe there is one vaccine, you can imagine which one maybe that did better than that. But yes, this has been a phenomenal launch. >> Okay. Mike, explain to me why on your most recent conference call that you actually guided down when I thought you might have guided up. You talked about flatted it down 6%. I was thinking about the pill and said, "Wow, this is going to generate huge numbers, but it's not translating in earnings per share." >> Well, we improved guidance actually and beat the consensus quite a bit. You might recall we came to the um year with a projection that our midpoint this year will be at minus 9% sales. >> In Q1 we improved on that midpoint to minus8 and now in quarter two we improved again moving the midpoint now to minus 3%. >> But I think people say why is it negative at all when you've got this pill that's taking the world by storm. >> Excellent question. Majority of our sales is on the injectable sides and last year on the back of MFN and price pressure we reduce the prices of OMIC and VGOI tremendously. >> Okay, >> we did that because we want people to get access to these medications. We did that because we're thinking above and beyond just a quarter. I'm thinking that while I have to deliver numbers on a quarterly basis, we need to build this company for decades long. It is not conceivable that people can pick up a box of OMI or Viggoi for $1,000, frankly speaking. So, we needed to take the the hard pill. We had to basically reduce the price quite a bit. And you know this from a math, if you have the price, you have to double the volume to make it even. But you can break, you can have the price on day one, you cannot double the volume on day one. >> But let me push back. Eli Liy's had some fabulous numbers. They are competitive with you. Um they are not as strong yet on the pill and yet they're generating numbers that are superior to Noos >> because Eli Liy has been gaining market share. Um and they're more diversified than Novo Nordisk. So if you take a look at Eli Liy, I believe some 60% of their business on is GP1. Ours is around 90. And on top of it, there is no secret that Lily has been quite successful actually in having volume uptake and market share uptake above and beyond Noble. >> Now, do you think that I know that you sued Eli Liy? Do you think that they've made representations that are not accurate? >> I am a big fan of competition. I think competition has to be fierce, >> but I also think competition has to be fair. >> Okay? I believe that patients deserve to know the full truth together with their physicians before they make a choice of what product to take. We believe that the advertisements that they have been doing while truthful is not the complete picture. It's built on older generations of um um of these products at old doses. We have something called the Viggoi HD, Viggovi highdosese in the market with efficacy on par with our competitor. We we would like the patients to know this when they're making their choice and um and that's why we're doing what we're doing. >> They did make a true claim. It's just you're saying may have been versus may not have been apples. >> They did a trial correctly on a head-to-head trial on a vigi 2.4 milligram dose. And we believe that people need to know very visibly that there is a more advanced version of Viggoi in the market with different profile and then they can make their choice and decide which product is the best. >> Well, but let's talk about this launch because it's quite exciting. I know that Lily has a pill too. They've started to see some uptick in prescriptions. They do have differences. You do have restrictions. Uh, I don't think the restrictions are all that meaningful, but obviously to have no restrictions like we hear from Lily is is better than your profile, but it doesn't seem to matter. Your your things just a bat out of hell. What's happening? Because you think it's word of mouth. And are there side effects that are more serious than anything that happens with the shot? Yeah. So, I think the US um market and the consumers have been incredibly honest about what preference um wins, >> right? When you think about what happened to Novais injectable business, it was predominantly because a lot of patients felt that our competitor has a more efficacious weight loss profile on the back of the older version I just mentioned to you and and therefore we started losing weight. Almost exactly the same thing Jim has happened on the pill. We have introduced a pill that reduces your weight by 17%. Lily's pill reduces your weight by 12% based on not head-to-head trials but our individual trials that we have done. The consumer is very honest about that. They want the 17% weight loss over 12. But initially we thought actually there could be some uptake for our competitor because the consumers might think that because you don't need to wait before um um you don't need to wait with your food before you take this pill. they will consider our competitor's product as a more um easier to use. >> I do believe they will. >> The world has seen it differently. Frankly speaking, because a doctor explains to their um patients, get up in the morning, >> brush your take the pill, >> right? >> Brush your teeth, go take a shower, and then go have breakfast. That's quite easy. On the other hand, the same doctor has to explain to the patient trying to take Ly's product, are you on a birth control pill? If you are, it's going to be problematic. >> But Lily could obviously come back with a more efficacious. But right now, you've got a really good runway and which is what makes me intrigued by the stock because I think that you may be able to have better numbers than you think. But I say that as a as a person who follows your company closely, who is has who is has to think a little more forward in order to be able to say this stock is too cheap. I mean I just don't after today I just don't see any but well there's always downside but I did want to ask you and this is really important you have a huge number of studies these amazed studies now you didn't win on that heart one but that also had kidney problems are you going do you are you confident that there's some things down the road including a pill that gets rid of fat but not muscle because that's the holy grail >> so we do not change strategy based on a result of a single trial. Okay, >> we are in a business together with our peers of failures, trials and errors. Hopefully the number of the successful trials and the successful introductions of med medications outweighs the number of the failures. That's why we are >> most drugs fail. Most drugs fail. >> Well, I think the reason you become 100 years old like our company is because we've had more successes than failures. right >> now we work quarter by quarter but we do build this company for decade longs going forward and yes I feel incredibly confident and coming back to your um comment about the stock price the stock market is always right but with a bit of a time difference >> what what I think we need to do is again continue the results like that we have shown in the last two quarters over a period of time and then this moment turns into a trend and hopefully the stock market will also follow. >> Well, I I think the pill's doing incredibly well and that's kind of a really important takeaway. If something's going to be the best launch of all time except for maybe a vaccine as we all know, that's quite exciting to our viewers particularly because the stock I can say you don't you don't I do is low. Mike Dustar is the president CEO of Novo Nordis uh comes on good times and bad. I like that and I think that this pill is worth following because it can change. I believe it can change the direction of the company. >> Thank you very much, Jim. Thank you. >> Coming up, with shares of Zoom climbing higher, Kramer's zooming into the data to see what's behind the company's latest rise. Next, >> the last few weeks, we've seen the stunning breakout in the stock of Zoom Communications, the video conferencing platform we all know that most people haven't thought much about since the pandemic. During the edge of remote work, Zoom was unbeatable. The stock traded all the way up to $588 at its co era highs. But once we started going back to normal, stock collapsed. By the end of 2022, it was trading in the mid60s. And unlike so many tech stocks got crushed in 2022, this one spent years languishing near the bottom. By the end of 2025, it was still stuck at $86 and change. This year though, Zoom's got its mojo back. It's up nearly 22% year to date, even as many other software names have been under pressure. Just in the last few weeks alone, it's run up nearly 20 bucks to 105. Why? For one, one reason. Let's do this. A very simple one. Zoom happens to own a sizable chunk of Anthropic, the AI lab behind Claude. See, back in 2023, Zoom invested $51 million in Anthropic. By January, we were hearing that that state could be worth maybe three billion or so. At the same time, Wall Street was going by Anthropic's latest fundraising round that valued the company at 183 billion. Then in February, they did another fund raise that valued the company at 380 billion. In May, they did another one, 965 billion. And suddenly Zoom's stake in the business was looking real valuable versus the market cap of Zoom. People started buying Zoom as a as a backdoor way to get into anthropic which is not public. And that's why I think Zoom had a big run this spring. But then in late May, the company disclosed that their anthropic stake should be worth about 1.27 billion on February fundraised the AI business at 380 billion. Given the latest fund raise, Zoom stakes should be worth I don't know more than double that amount if not more. In the end, Zoom's market cap now at just over 30 billion dollars and its stake of Anthropic worth maybe two to three billion. Well, you know what? Let's call it a significant positive. If you think Anthropic's valuation will keep rising ahead of the IPO, which is likely coming later this year, then Zoom could potentially have more upside from that stake. But ultimately, I now think that the stake in Anthropic is baked into the share price. For me, I'm calling a nice bonus, but it is not the real story. The reason I'm talking about Zoom tonight is much more straightforward. Back in late May, they reported a strong quarter. The revenue grew 5.5%. Now, that is a slight acceleration versus the previous quarter. It did beat expectations. Their operating margin came in higher than expected, up 160 basis points year-over-year. And that translated into a 13centent earning speed off a$142 basis. And that was noteworthy. Where did these numbers come from? Well, Zoom is actually now killing it with enterprise customers, companies, not just you, not just me, not just individuals. The forward-looking metrics, the remaining performance obligations also look very strong. And Zoom raised every line of its fullear forecast. The only flaw, if you want to call it that at all, was the guidance for the second quarter, which came a little late. But that didn't stop the stock from jumping over 9% in response. Of course, that was nearly 3 months ago. Zoom reports again in two weeks, August 25th. I don't have any particular insight into how the quarter should look, uh, what what people are looking for, except that this company now has a wellestablished track record of beating what people are looking for. They've beaten earnings in 19 of the last 20 quarters for heaven's sake. That's pretty good. Which brings me to the thing I like the most about Zoom Communications. They've got a great easy to use product. See, if you're like me, when you get a meeting on invitation that includes a Zoom link, you don't think much of it. You know, you're just going to press it. If anything, you breathe a sigh of relief because you know it'll be easy to connect and everything will work. Unfortunately, that's not exactly the case when you see a Google Teams link. I have one of those this morning and I was like freaking out and sweating. I missed my I was a minute and a half late to a CEO of whom I really care about because of Google Teams or god forbid a link to Microsoft Teams based video conference room. I include Cisco's WebEx, but I can't recall seeing a WebEx meeting link since the pandemic. I do feel we have a panic wash over me when I see any of these. It means I'm going to screw it up and I'm going to have a pretty good chance of missing the meeting. I dread it. Come on. You know what I'm talking about. You might feel like I do. They make it too tough. Zoom makes it easy. I bring this up because in the post-pandemic year, the main knock on Zoom was that video conferencing software would essentially become commoditized. But that simply hasn't happened. Zoom has the best technology which keeps helping them win new customers and hang on to those customers. Especially in the enterprise, people don't want to fear a conference call. Plus, they keep adding new AI features like tools for meeting prep, automatic transcription, note takingaking during meetings. That was something that Zoom Communications founder and CEO Eric Yuan emphasized when he came on the show last month. Look at this. Zoom's value goes far beyond the meeting. We power the prepare preparation before the meeting, the collaboration during the meeting and action that follows. Essentially, we embed AI into every stage of the work conversation uh collaboration action and completion. And we really want to become a system of action that can connect work from a conversation to to completion. That's why enterprise customers really like our mission. See what he said? He said all that stuff that's for the enterprise. That's for companies. That's where the real money is and that's who he's going up against. So you may have been excited about the anthropic angle. I think the real story is that soon business is now thriving with companies and they're putting up very good numbers. their product just works better than the alternatives and that matters. And by the way, there's no more excuses. You can't just say, "Oh, Zoom's a consumer product." Not with all the stuff that Eric just talked about. Plus, even after the stock's excellent run this year, Zoom's trades at just 17.5 times this year's earnings adjustments way too cheap versus its Renaissance. So, you don't need to worry about being late on this one. Doesn't hurt that Zoom added $1 billion to its buyback in May, bringing the total repurchase authorization to $1.625 billion, more than 5% of the company's current market capitalization. So, here's this really important bottom line. We'll know more when Zoom reports again in two weeks, but honestly, given that it's cheap, it has the strongest management team, and most importantly, it has the best product for the consumer and for the enterprise, you got a permission to buy it tomorrow. Maybe buy some more after the company reports. Never mind. OH, NO, MAN. WE GOT QUESTIONS. HOW DYNAMITE is that? I was thinking I was doing my morning show. David, don't talk to me like that. Okay, let's go to Chris in Virginia. Chris, >> hey Jim, want to ask you about Uber. Um, you know, they exceeded their revenue expectations year-over-year, but its outlook fell short of the estimates. Um, based on the current riskreward profile, would you consider Uber today? Why or why not? >> Okay, I love this question. I in my book, How to Make Money in Market, I listed a couple of companies that I thought were going to be really big. I I said that Cloudflare would be big. I said that Door Dash would be big. I said that Airbnb would be big and I said that Uber would be big. All three of the former, they all work. I'm telling you this is number four and it'll work too. Right. Zoom is a great management team. The product is superior to everybody else's and it's easy to use. You got about a commission to buy something. Much more money including my post during exclusively data center player coherent. Then today's consumer price index showed food prices are actually heading lower. I'm laying out what that means for you and also the countries have a sum up of these big restaurant tapes and of course all your calls rapid fire in tonight's edition of the lighting rally. So stay with sometimes even the best stocks get a little bit ahead of themselves. Today we got a terrific quarter from Momentum. It's a high fiber optics play with big data center exposure and in response to chief rival coherent justifiably I think rallied 8% they coherent itself and put an even better quarter tonight but the stock was sold off at after hours trading I think largely just because it came in a little hot the actual quarter was excellent as you will hear a really terrific top and bottom line beat management giving strong guidance for the current quarter but the stock had run a little bit let's take a closer look with Jim Anderson the CEO of coherent who's joining straight from his earnings call Mr. Anderson, welcome back to Man Money. >> Thank you, Jim. Thanks for having me back. Great to be back. >> It's good to hear. You know, this after hour stuff doesn't it should not impact anybody because what really does matter. 34% revenue growth above expectations, gross margin up more than 200 base points. Really hard to do. And then, you know, 12centent better from the actual earnings. So, give us some of the highlights. What's driving what I think are just fantastic numbers? >> Yeah. So, first of all, we're just re really pleased with the results we had in our June quarter. Um, that's actually the seventh consecutive quarter of record revenue. Uh, and we saw growth accelerate in our June quarter. We passed the $2 billion per mark on a per quarter basis. And, uh, other thing that we gave was guidance that uh, we expect to be over three billion per quarter within the next 12 months. So, the business is just performing really really well. the the demand is outstanding and it's really being driven by AI data center and our data center and communication segment which is about 80% of our total revenue and that segment and if we look at our June quarter grew by about 60% year-over-year and we're expecting that growth to increase that growth rate to increase in the current quarter so you know we're on a great trajectory >> so give us a sense of what you're replacing in the in the data center why you're so much better than say two years ago in the data center because it's clear that some things are really getting you know are souped up and you're part of that. >> Yeah, for sure. I mean one of the things that we're really excited about is we're seeing more and more of the use of optical networking in data center architecture. So as we're building these huge data centers, as we're scaling, uh more and more of the data that's being transmitted between the processors in the data center is being uh transferred using light instead of copper electrical connections. We're seeing this big technology transition away from copper electrical towards optical networking over time, which is great for the industry and clearly great for us. That's really that's really our expertise is all of the optical networking technology that enables that data to be transmitted using light at the end of the day. And that um is the most power efficient, fastest, highest bandwidth way to transmit data. And so we're seeing just uh when we look over not just the near-term, but over the long term, we think there's just tremendous growth ahead of us. Do you think we'll ever be able to replace uh copper with fiber, which would certainly be a much more efficient way to do things and certainly burn less hot? >> Well, look, that's what's been happening over decades. The first telecommunications networks were built with electrical networks to begin with, but those were replaced with optical long ago. When we first built data center networks, the data center networks were all electrical. Now, all of the connections between the server racks, they're all optical now. the the electrical has been replaced and now we're replacing the last part of the data center network that's still copper electrical and that's within the racks of the data center and that will start to convert to optical over time and it's really just driven by physics at the end of the day as you increase the data rate uh you basically you can't transmit that much data using copper and you have to switch to um optical connections because that's the most power efficient fastest way to transmit the data. So, this is just part of a long uh transition that we've been doing for many years and really exciting for us because it's just a massive expansion in our addressable market. >> Well, let let's talk about that because you're also really important when it comes to America and re-industrializing America. We want this technology here. I would like to think that this technology be American and not necessarily Chinese, but you have a Sherman plant. You have a history of a relationship with Nvidia. Can we be um do we have to be dependent on the Chinese on this food chain part of the data center? >> No, I think especially for the critical components, the very high intellectual property, very difficult to make components, we can absolutely build those in the US and we're doing that today. Actually, uh Coherent was founded as a US manufacturing company over 50 years ago and we're super proud of that uh heritage. Uh today we have tremendous US manufacturing footprint. Now we do manufacture globally. We have global locations. We compete on a global market. But we have over 20 manufacturing sites here in the US across many different states. And Jim, as you mentioned, one of our uh really flagship facilities is our production plant in Sherman, Texas. This is making some of the most advanced optical uh optical capability anywhere in the industry. In fact, it's the most advanced indium phosphide production plant. Uh, you know, Nvidia is a partner with us there. We had a groundbreaking on our expansion there in June. Nvidia and Jensen Wong were there with me uh to do the to do the groundbreaking. And so, no, I think this is a great proof point of, hey, we can build very advanced technology right here in the US. And we're we're really proud of that. >> Now, on the Nvidia deal, you have a long-term supply agreement. Sometimes I think, geez, I who doesn't want Nvidia's endorsement? That's the most important door from the world. At the same time, your prices are going up up up. I mean, you could Are you leaving money on the table or is it just a great combination? >> Well, look, we're Nvidia's been a long partner of ours and a long customer. They've been a customer of ours for over two decades. So, we've had a long history of innovation with them and we're we're, you know, really excited about continuing to build that partnership moving forward all around integrated co-packaged optics. But we also have a lot of other customers and so we're also supporting our other customers uh as well and so look optics is just becoming more and more important to data center architecture and we want to support Nvidia but we want to support the rest of our customers as well. >> Okay. Do you think reports on banning right now Chinese components from data centers we're hearing a Reuters report about the president the Trump administration drafting a ban on that. Have you heard anything about that? And is that a good thing or a bad thing? Well, I think it's speculative at this point, but uh you know, certainly something like that would be beneficial to us. Uh we're the industry's largest US supplier of uh products called transceivers that go into data centers. Um but you know, Jim, we always want to compete for our customers business based on our technology and based on our production capacity. And so we think we have the best photonic technology in the industry. We have the widest and deepest um portfolio of photonic technology. But the other thing is you pair that with our incredible manufacturing scale and the fact that we have this really important strategic footprint of USmade manufacturing over 20 facilities. We're really proud of that and we think that combination is unique. >> Well, I I couldn't I've been following your company for some time and it's obviously a technological marvel and you're terrific to come on our show. Congratulations on a great quarter. Jim Anderson, CEO of Go here and thank you Jim. It's good to good to talk to you as always. >> Money's back here for the bank. Absolutely. >> Coming up, you've got questions, Kramer's got the answers. Get charged up for a fast fire lightning round next. IT IS TIME THE LIGHT round said bye bye bye bye bye bye bye bye bye bye bye soldiers know the course my step be and then the lightning round is over. Are you ready ski d the light round and we're going to start with Tom in New Jersey. Tom >> hi Jim I love your show. Thank you for what you do. >> A thanks Tom. Appreciate it. >> I was hoping to ask you about RX RX. You know, I think that that company uh it better come up with something soon because right now all it is is coming up is losses and that is not the way it should be. Let's go to Sunil in Minnesota. Sunil, >> hi Jim, thank you for taking my call and we love all the everything you do for us. >> A thank you. >> My question is on >> my question is on Fastly. >> Fastly. Yeah, Fast Man that thing came back from the abyss. I have to tell you, I still like Cloud Player more, but I hand it to those guys. I also like Akami, but Fastley's in the game and it's not easy to be in that game. Now, we're going to go to Philip in Arkansas. Phillip. >> Yes, Jim. Uh, what's your thoughts on Next Tier Energy? >> I don't like Nexter. I sense it. I sense trouble. I don't know about that deal. And I don't know if that company's as well as as they think they are. How about that? Whoa. Did he just say that? Yes. Let's go to Craig in Tennessee. Craig >> Booya Jim from Nashville, Tennessee. >> Beautiful. Love it. What's up? >> I've got a position in a stock that's down 13% for the year, but I really like it. I'm wondering if I should add to the position of ticker symbol Hi, Huntington. >> Yes, this president seems to be inclined to be able to give the Navy a lot of money. And I think that that uh that that's the only that's the only game in town, frankly. I think they do with the good job. Let's go to Will in Colorado. Will, >> hey Jim, on squawk this morning, your friend David said that twothirds of the AI electric projects won't ever happen. And in light of that, I wanted to know what your thoughts are on Vistra and if they're too reliant on >> No, I like Vistra. I'm going to leave it too far. I like Vistra and I like Constellation Energy. I think these things are oversold and they make a ton of sense. Constellation Energy, by the way, is a really fantastic company. And that, ladies and gentlemen, conclusion of the LIGHTNING ROUND. THE LIGHTNING ROUND is sponsored by Charles Schwab. Coming up, Kramer sampling the restaurant stocks that have been redot and selecting his favorites. Next, we got a shock today and it was a positive one. When the consumer price index came out this morning, we saw some key food categories actually going down. Prices for meat, poultry, fish, eggs 7% over the last month. Pork down 1.5%. Fruits, veggies, dairy decreased.1%, lettuce plummeted 16.4%. But again, that's the cycllospor outbreak. Well, you know what though? Doesn't it feel like it's been ages since any food has fallen in price? There's just one problem. Try finding a national restaurant chain that cut its prices because of these declines. As Kevin Hurricane, the CEO of Cisco, explained to us last night, it just doesn't work like that with the big chains. You ought to know, he runs the world's largest supplier of food to restaurants. Local restaurants, the opposite of the big national chains, are cutting prices as their costs come down. And that's a major reason why local mom and pop eeries have been taking market share for 6 months. Remarkable stretch. One that I think is even it isn't even noticed by the national chains. They don't change their menu or their prices because food gets cheaper. Be they want raise prices when things went higher. That seems unfair to me. How about you? Maybe that's why the numbers for many chains that didn't roll back or keep prices low are distinctly suboptimal. While others which held the line on food to help you uh are beginning to show a lot of profits, exceptional profits as customers seeking value flock to them. The stocks of the companies that held the lighter cup price are now naturally going higher too. It's a relatively easy way to figure out which restaurant stocks are worth owning. For example, among all chains is Brinker. That's the king. The parent of Chili's reported stupendous great quarter today and its stock shot up more than 10%. Why? Simple. They have a host of really good meals for $10.99 including a crispy chicken sandwich or a really good big burger, fries, unlimited chips and salsa with a drink. By the way, the chips and salsa and the drink are bottomless. People love that. I love that. It's a better deal than you get from McDonald's for one of their Big Mac combos. I'm sorry. I don't want to pay anything more than $10.99 at a fast food joint if I can go to a Chili's and get that kind of bargain with a waiter or waitress. No wonder they've had 21 consecutive quarters of same store sales growth. This time their comps are up 6% which is stellar, especially when they're up against insanely difficult comparisons from last year. That's all thanks to Brinker offering good value like it $6 margarita of the month with real good tequila by the way and a $36 domestic beer during happy hour. Now I could never duplicate those prices when we own Barcelona and Brooklyn. I would have loved to but we'd be losing money. Hey, by the way, we're going to hear directly from Breaker CEO Kevin Hawkman on the show tomorrow. We're going to talk about this stuff. Don't miss it. What else is working? How about Texas Roadhouse? been on a run because it tried to keep a 1099 steak deal kind of not all the time but a special on the menu and they did that even in the face of runaway beef prices. That's a big reason why its stock has moved from $169 to $214 in just three months. Customers have good memories for those who didn't raise prices. Today Cobb report a terrific number while it does some pricey meals does have this $12 offering that's consistent with Mediterranean chain known for its healthy fair stock roast $8.66 66 cents in response to its good results. Listen, Americans want value wherever they can find it. They love points. They love value. They love affinity clubs. They love all that stuff. Restaurants that don't have it or or not offering better prices. They're putting up lousy numbers. You have to work at it and be prepared even to take a beating on some items like Texas Roadhouse with steak to keep the customers coming in. Now with local restaurants cutting prices is only going to get worse for the price gouchers. What can I say? They brought this on themselves. I like to say there's always a more market prop just for you and your mid money. I'm Drew Kramer. See you tomorrow. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full MadMoney disclaimer, please visit cnbc.com/madmoney disclaimer.